Airlines have been swimming in profits over the last couple of years,
thanks to low fuel costs, fewer empty seats on departures, and plenty of
passenger fees.
Singapore flights
Things
have been going so well, in fact, that in some cases airlines have
lowered airfare prices and improved the flying experience with new
entertainment systems, better coffee, and the return of free snacks.
But the trend toward lower flight prices and a more customer-friendly approach appears to be fading.
Oil
and labor prices are on the rise for airlines, causing profits to
shrink. For example, Delta’s profits in the fourth quarter of 2016
decreased 36.5% compared to the same time the year before, largely due
to higher wages paid to pilots in the aftermath of a new labor contract.
Total airline profits hit around $35 billion in 2016, and they’ve been
projected to reach “only” $30 billion in 2017.
Naturally, the
airlines aren’t going to watch passively as profits decrease. Most
industry experts foresee higher flight prices this year—and to some
degree, rising airfares are already here.
The travel booking and
airfare-tracking estimates the average domestic flight price at $222
this month, compared to $210 in January 2016. The site’s forecast calls
for U.S. flight prices to average $239 in March 2017 (compared to $227
in March 2016) and $265 in May 2017 ($247 in 2016), up to a high of $271
in June 2017 ($254 in 2016).
While higher airfares are expected
across the board, analysts anticipate that business travelers will face
particularly steep price hikes in 2017. “We can expect that fares for
business travelers will be trending up,” Atmosphere Research Group
analyst Henry Harteveldt told the Los Angeles Times. “Airlines are
always trying to get a pound or more of flesh.”
The Wall